Armanino Blog

Dynamics AX Cash Receipt Deductions & Accounts Receivable

April 20, 2016

Microsoft has added the much anticipated cash receipts deduction functionality to Dynamics AX. The functionality in AX version CU8 allows users to take deductions while recording the cash receipts on their AR payment journal. In previous versions of AX, it has not been possible to select the same Sales Order invoice twice, allowing a user to record the actual payment received, and also record the short payments against the invoice with an offset to a Ledger account instead of a Bank account on the same payment journal.

Goodbye, work-arounds!

In the past, users worked around this issue by first recording the actual payment received, and then creating another payment journal to record the short payments. Unfortunately, this work-around created numerous issues with Check & Bank reconciliation – not to mention, it was double the work to record the payments.

With AX CU8 however, users can take deductions to record short payments on invoices or batches of invoices with an offset to a ledger account (e.g. cash clearing account or customer trade allowance account) depending upon the business and nature of short payment. This allows users to settle the invoice and customer balance at the same time.

How does it work?

Check out the process to utilize this new functionality below:

First, create an AR Payment journal: AR > Journal > Payment Journal > New > Enter Customer payments

  1. Select the customer for which a payment has been received.
  2. Mark the invoice or Invoices for which a payment has been received
  3. Then specify the check amount that has been received.
  4. Click "Save in journal".
  5. Go back to the journal lines.
  6. Click the double arrows ">>".
  7. Then select deductions.
  8. On the deductions form, the user sees the following: Settlement mount: This the total amount of the invoices marked.
  9. Payment: This is the check amount that was recorded under edit customer payment above.
  10. Deductions: This is the deduction or short payment that has been recorded in the form thus far .
  11. Balance: This is the balance yet remaining on the invoices or batch of invoices.
  12. Type: This is the drop down menu where users can select the type of deduction that is being taken. In turn, the types of deduction is mapped to a ledger code. There could be multiple types if the short pays are for various different reasons.
  13. Right-click on the "Type" field and view details to start creating short payment types.
  14. Select New. Then specify the type (name & description) and the deduction offset.

On the main deductions form you can start taking deductions. As the user starts entering deductions, the balance and deduction amounts adjust themselves to show the calculation of how much deductions have been recorded and the balance remaining.

In the image below, the balance is "0" while the deductions are "67.98".

About Short Payments

If short payments are made against a particular Sales Order or invoice, those also can be marked under the Sales order and Invoice Fields noted below.

If the user needs to specify a description or identification, the new release offers a space for a text note.

After closing out of the above form, the user would see that the deductions are automatically pushed over to the journal, along with the offset ledger accounts (specified under deduction types).

  • Post the above journal.
  • Go to the print journal to see the ledger postings, and the user sees how nicely the ledger postings are posted in Sub ledger and ledger, clearing the AR and debiting the above deduction types offset accounts.
AR (130100) - Cr. - $ 250 Bank (110110) - Dr. - $ 250 AR (130100) - Cr. - $ 20 Ledger (618150) - Dr. - $ 20 AR (130100) - Cr. - $ 47.98 Ledger(803200) - Dr. - $ 47.98

The Armanino Dynamics AX team is excited about this new functionality. Share your comments and questions below or contact our team directly to learn more about Dynamics AX cash receipt deductions. Be sure to check out the Armanino Dynamics blog for regular tips and tricks on your Dynamics solutions and integrations.

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